Validity of assessment under Section 153A r/w Section 144 challenged due to alleged nonservice of notice; assessment quashed and remitted.

Validity of an assessment under Section 153A read with Section 144 turned on absence of proof of service of a notice under Section 142(1); the respondents could not show the 142(1) notice or service of the subsequent assessment order, and the assessment was passed ex parte the very next day. The court found that the taxpayer had produced a 'J' form to a Committee (which the Committee accepted) and that it was improbable the form would not be produced to tax authorities if given opportunity. The impugned assessment was set aside and remitted for fresh consideration in accordance with law.

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Issues: Whether the assessment order dated 30.09.2021 passed under Section 153A read with Section 144 of the Income-tax Act, 1961 is sustainable where notice under Section 142(1) was not served and no opportunity of hearing was afforded to the petitioner.

Analysis: The Court examined the factual record regarding seizure of cash, the District Level Grievance Redressal Committee's order accepting the petitioner's 'J' Form and finding the transaction genuine, and the sequence of notices and orders issued by the Income Tax authorities. The Court noted absence of any record showing service of notice dated 29.09.2021 under Section 142(1) on the petitioner and observed that the assessment order was passed ex parte on 30.09.2021 without evidence of service or of affording the petitioner an opportunity to be heard. The legal framework considered includes the requirements of service of notice and the principles of natural justice applicable to assessments under Section 153A read with Section 144 of the Income-tax Act, 1961.

Conclusion: The assessment order dated 30.09.2021 under Section 153A read with Section 144 of the Income-tax Act, 1961 is unsustainable for want of service of notice and denial of opportunity to the petitioner; the order is set aside and the matter is remanded to the Assessing Authority to decide afresh after affording the petitioner a hearing.

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